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Vale S.A. Message Board

  • ivaderperswader ivaderperswader Aug 28, 2013 6:44 PM Flag

    PEG Ratio: 0.4

    Vale (VALE - Analyst Report)
    PEG Ratio: 0.4
    5-Yr Projected EPS Growth: 20.4%
    Vale is a metals and mining company headquartered in Brazil. A PEG ratio of 0.4 might be tempting, but investors will probably be wise to ignore its siren call. Based on current consensus estimates, analysts project a 5% drop in earnings for 2013 and a 12% drop in 2014. And those estimates have been declining for several months. It's very unlikely that Vale can compound its earnings at an average of more than 20% from here when earnings are expected to decline this year and next.
    The Bottom Line
    The PEG ratio can be a useful rule of thumb for finding undervalued securities. But it should only be a starting place in that search. Don't blindly rely on those published 5-year growth rates and do your own homework!

    Sentiment: Buy

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